The Partnership for Supply Chain Management (PFSCM) recently had the opportunity to collaborate with a principal recipient (PR) and manufacturer to source a large emergency order of HIV self-test kits locally, in Uganda.
Locally sourcing opportunities — even though considered a supply chain best practice, which can reduce costs, risks and waste — are actually quite difficult to realize, especially in sub-Saharan Africa, which is highly reliant on imported drugs and diagnostics.
From PFSCM’s experience as a procurement services agent serving low and middle-income countries, we see that funded, or donated health products for large health programs are usually imported because it is more cost effective than buying locally.
Studies and literature show that the fragmented landscape of distributors, wholesalers, and retailers — who all add their individual markups to the product1 — and the shortage of manufacturing capacity, weak regulatory systems and poor accessibility are all “supply chain gaps” that impact the price competitiveness of locally supplied, or produced health products.
Despite these challenges, PFSCM secured tens of thousands of HIV self-test kits for Uganda’s Ministry of Finance, Planning and Economic Development through a local authorized distributor at a price comparable to that of importing and shipping via ocean. The emergency shipment was required urgently, and because PFSCM was able to source the products locally, the shipment was delivered almost right away.
PFSCM Category Manager for Rapid Diagnostic Tests Grant Kouri says PFSCM collaborates closely with manufacturers to better understand their global footprint, their authorized distributors’ pricing structures, and the availability and shelf life of their products in-country.
“Local sourcing is an important procurement strategy for us, and through good supplier relationships we are helping to ensure that we, and our peers, have access to affordable quality products that are readily available locally, for all purchasing scenarios including emergency responses.”
He adds that local sourcing not only improves access, but also helps local distributors develop their service offering to better meet the needs of local and international buyers.
“Each order placed locally means an authorized distributor is building its experience and adding to the resilience of the local supply chain,” concludes Kouri.
1.www.mckinsey.com
An example of an HIV self test kit comparable to the ones PFSCM procured. These particular tests make use of an oral/gum swab and not a blood sample.